DES MOINES, Iowa — The Republican-controlled Iowa Legislature could face pressure next session over its decision earlier this year to reduce a key Medicaid benefit for poor and disabled people, but it’s still unclear how much lawmakers are willing to reverse course on an issue that critics say will be detrimental to the state’s health care system.
Some Republican lawmakers have begun to question whether the cut to so-called retroactive eligibility, which essentially helps new patients with recently incurred medical costs, was larger than intended. They’ve indicated the topic will be revisited when they return in January, and health care groups are expected to lobby for some kind of action. Several of them spoke against the change at a legislative committee last week.
That meeting included candid talk from some GOP lawmakers, like Sen. Mark Chelgren of Ottumwa, who raised various ideas about additional exemptions around the change, which took effect Nov. 1.
“I think that this is something that’s going to have to be solved in the next session,” he told his colleagues.
Brent Willett, president and CEO of the Iowa Health Care Association, has warned the reduction will be particularly harmful to the nursing homes and other long-term health care facilities that make up his group.
“I take those legislators at their word that they’re interested in looking at this,” he later said after the meeting.
The retroactive benefit is a staple of Medicaid that helps newly eligible patients with medical bills that go back three months. It’s aimed at ensuring health care providers accept low-income people who qualify for Medicaid but may not be signed up yet. It’s particularly critical for those hurt suddenly, such as being injured in a car crash or suffering a brain injury.
Under Iowa’s change, which was briefly mentioned in a roughly 130-page health budget approved last spring, that window of eligibility was reduced to the first of the month in which a person applies for Medicaid. The issue gained national attention for its scope because only a handful of states have reduced retroactive eligibility. Many of those states targeted people who recently gained Medicaid coverage under the Affordable Care Act. Iowa uniquely sought to cut the benefit beyond that, to a swath of people who included the disabled and children.
In the end, the federal government approved a plan that only exempted pregnant women and children younger than a year old.
The state’s human services agency said the change would save money. It previously estimated a savings of nearly $37 million total, including more than $9 million for the state. Officials predicted about 40,000 Iowans would be affected annually.
Multiple health groups argue the move creates a massive financial burden for hospitals, providers and patients. They also claim the state didn’t properly account for the extent of that impact.
Flora Schmidt, executive director of Iowa Behavioral Health Association, warned the ripple effect could be fewer providers in rural parts of the state offering treatment for things like substance abuse and mental health.
“It’s going to come back onto the taxpayers and the providers somewhere else,” she said. “It’s just the shifting of the cost to someone else.”
Wendy Rickman, a top administrator for the Iowa Department of Human Services, defended the data provided. The department has been clear that aside from cost savings, the change would better align with the private insurance market.
“We took this responsibility extremely seriously and worked to the very best of our ability to get the right numbers for you,” she told the committee.
Scott McIntyre, a spokesman for the Iowa Hospital Association, expressed hope lawmakers would return to the issue in 2018. In an email he said, “We would certainly support reversing the policy and will be monitoring the situation as the session approaches.”
This is expected to fall on Republicans, who hold majorities in both chambers and ultimately voted to pass the health budget that included the benefit reduction.
GOP Sen. Mark Costello, vice chair for the health committee that could review any proposed legislation, said he’s open to a suggestion that would ensure patients have a clear period for reimbursement. Some critics argue an injury at the end of a month versus the start could greatly impacts costs for all parties.
Costello, of Imogene, said Friday he wants more information from health care groups about their claims that the impact is greater than what’s been spelled out by DHS.
“I think we just have to try and figure out a little bit more what’s really happening and who it’s really going to affect,” he said.
Sen. Pam Jochum, a Dubuque Democrat, said she believes something is off about the estimated impact of the change because of the numerous calls she’s received from constituents about the issue. She also worries whatever happens in the Legislature will take too long.
“By the time we address this in the legislative session, it could be six months from now,” she said. “It might be April before any decision is made … I don’t know what the impact is going to be.”